Landis+Gyr is one of the world's pre-eminent metering companies and, as such, is very active in smart metering, the technology that hooks up homes and businesses to data networks so as to better monitor and interpret energy usage.

This technology, seen by many as being key to achieving the European Union's '20-20-20' goal of reducing its energy consumption by 20 percent by the year 2020, using 1990 levels as the baseline, will replace standard electricity and gas meters with systems that let consumers understand and control their own consumption.

Landis+Gyr (L+G) has already rolled out first-generation smart meters in some areas, and is keen to get into the burgeoning UK market, which is likely to be the first to get a second-generation infrastructure. ZDNet UK spoke to the company's UK chief executive, Stephen Cunningham, to find out more about the risks and benefits of smart-metering technology.

Q: Where and how has smart metering technology been rolled out so far?A: The US, Australia, the Nordics and Italy all have first-generation smart infrastructures, which are largely capable of reporting meter reads. For the US, the Nordics and Australia there's also a degree of very coarse load control, such as the ability to [remotely] switch off air-conditioning.

The UK and the rest of Europe are now looking at the second generation of smart metering, with a finer degree of customer control and including microgeneration. What customers will be able to do is balance the different types of energy they use in the house. Two-thirds of that is gas, used for heating, but that's an increasingly scarce resource, so smart metering will be intelligent enough to say: "At 5am we have wind power, so we'll heat with wind power". It's that level of intelligent control.

It's the same with solar — if it's a sunny day, you could heat water in the middle of the day and leave it to use later on. [Smart metering can also be used for] tracking and managing electric vehicles. Getting to 20-20-20 means we have to play across lots of different areas to optimise the system.

Most of this second-generation smart metering is still open for tender. Is L+G definitely lined up for any part of it yet?We know we're going to do a substantial chunk with British Gas.

Will every home and business have a monitor, so people can see for themselves what energy they're using and when, and adjust their usage accordingly? The consumer group Which? has pointed out that, without a monitor, smart infrastructure is of limited use in changing consumer behaviour.It's all at the prospectus stage, but it's really clear at the moment that every home will have an in-home display, unless the customer opts out. But even then, suppliers would still have to give you a display later if you ask.

The really big difference [between the second generation and existing smart monitors] is that none of these things today will tell you how much gas you're using. You'll see a display of combined usage. I agree with Which? that, without that display, the system's going to have minimal value until you get to full automation, by which I mean a new generation of white goods that automatically connects with the energy network.

What's the timescale on all this?It's a challenging set of timescales. The government currently wants to start the rollout in 2013 — well, in 2012, but the central communications system won't be ready. So it's a staged start. If you could start in the mainstream at full tilt in 2013, it would be 67,000 homes [having smart meters installed] a week, full-tilt through to 2020. If you wanted to meet a 2018 target, it would be 85,000 homes a week. It's a massive logistical challenge.

The only things that will improve our chances of hitting a 2018 target is trying to make the 2010-2013 period shorter and more effective, to start earlier and in a more fluent fashion.

What would that take — more government subsidy?No, this is all [energy] supplier-funded. For them, speed is of the essence. Making it happen more quickly is all about making decisions. We will be the first country to install a second-generation system, so [we have proposed] an open specification. Rather than waiting until 2011 to define the specification, we'll give you this.

Surely that benefits L+G and its partners in the specification, Elster and Secure, though?In terms of accelerating the industry, it does, but in terms of giving away our intellectual property it does not.

The more bad decisions that get made, the less...

...publicly attractive [smart metering] will be. This work will let anybody build a meter and have it work at a minimum with anything built by our three companies. It will be helpful for development and financing — there will need to be additional funding into the market by the major banks, and the more risk we can take out for them, the better.

How much does it actually cost to put a smart meter into a home?According to the government prospectus, it will be between £140-160 for the gas meter, the electricity meter, the monitor and the communications. Typically, an installation is somewhere around £85-110. There's a real trick to optimising those — making the sets easy to install, easy to communicate to customers, and getting the training and resourcing of the roll-out right. The level of customers' [education] will need to be quite different to domestic non-smart meters today.

What communications technologies will you use?We think it should be ZigBee Smart Energy Profile for the home area. That's functionally rich enough to cope with the level of sophistication needed for the UK market. For the wide area, we are ambivalent. Practically, the only solution now is GPRS, and Vodafone, O2 and Orange have all committed to supporting GPRS for at least 10 years. Otherwise, it could be mesh, or lightweight radio.

Does connecting people's meters to a centralised network not make those systems less secure?We think it makes it more secure because today, if you look at the balance of risk, the biggest risk is where we get our energy from — nuclear plants and gas pipelines through [eastern Europe]. That's an insecure energy supply.

But a remotely accessibly meter must surely be less secure than a meter that has to be physically read on-premises.The UK's smart grid is looking to solve high-level insecurity, but also privacy and personal issues. There's no reason a smart energy system should be less secure than a smart financial system or smart IT system.

If you build a flexible IT system, which is what we're building here, all 26.5 million homes and a minimum of 96 million smart devices in those homes will be virtually connected to every supplier, network operator and generator in the UK, and third parties too. I don't think there's any less security at a home level. The issue comes when you look at the core of the grid — Scada [supervisory control and data acquisition] systems and so on. In the UK programme, we are looking at existing systems and thinking how they can be made more secure.

If you connect a home, there is clearly a level to which you can hack a meter, if you are determined enough. All meters planned for the UK will be standalone — if the system goes down, all information [will be retained in the meter]. If [physically] isolated, the home is still connected to the grid. We are not separating physical wires or gaspipes.

Could someone, for example, hack into a home's meters to monitor energy usage and use that information to tell whether the occupant is away?The [network] will only extract one read per day. In the home, a read will be taken once every 15 minutes, but it won't get sent to the network unless the customer chooses. If you could extract from that 24-hour data enough [to know when the occupant is at home], you'd be pretty good at understanding consumption data. You'd be better off standing outside and seeing when the lights go on and off.

Google and Microsoft are very keen to get into the smart infrastructure business — do you see them as rivals in any way?No, that's offboard data processing, where the customer chooses to export data to a third party. We operate in the utility space, which is highly secure and private. We absolutely collaborate with Google and Microsoft to export data in a secure, firewalled fashion.

For us today it would compromise our position to also operate in the application space. There will be a million apps for your iPhone, but that has to be an individual decision. People worry about exporting information, but a whole generation will be the first to tick the box that says "share my data". Giving a bit of information about how much electricity they use is tiny compared with financial history, personal data and the web.